What's Your Plan if Disaster Strikes
So your business is not in hurricane country or sitting on the San Andreas Fault. How can you say it's completely immune to major disruption? What about flooding or storm damage? Computer viruses? A lasting, regional power outage? Fire? Chemical spills? Or violence? What's your company plan if a disaster strikes?
"Everyone needs a plan," says Philip Jan Rothstein, president of Rothstein Associates Inc., a management consulting firm and publisher specializing in business continuity and disaster recovery.
Buying insurance does not constitute a plan, Rothstein says. "Insurance comes after contingency planning."
Most people feel, "We've got insurance. We don't have to worry about this." But, Rothstein contends, "insurance's job is to take care of the things that you could not take care of yourself. The contingency plan's job is to put you in control of an unreasonable situation. If you have an effective contingency plan, you may save some money on your insurance premiums."
More importantly, he says, "the first step is having the disaster not happen. A hurricane can not be a disaster if you are prepared for it."
A fellow of the Business Continuity Institute, Rothstein walked CustomRetailer through some key business continuity issues for owners/operators. Many of the ideas he outlined play out in two disaster case studies that follow, beginning on page 66: one on Los Angeles market-based Wilshire Home Entertainment, and another on Orlando-market based Absolute Sound.
1. Back Up Everything Regularly, and Put the Backup Materials in a Safe Place
"For just about any business, the biggest issue, whether a natural disaster or some other kind of disruption that's confined to one's business, is keeping track of what's going on," Rothstein says. "Losing track of receivables can be as devastating as losing merchandise and materials. So it's key to have all of your business records backed up. What that does not mean is making a copy and sticking it in your desk drawer. It means having complete copies at a secure off-site location not subject to the same threats and vulnerabilities" as your business.